'BUOYANT' RP ECONOMY CAN BOUNCE BACK - GMA
MANILA, OCTOBER 30, 2003 (STAR) By Marichu Villanueva - President Arroyo expressed confidence yesterday the economy remains "buoyant" enough to absorb the shocks generated by the raging political crisis in the country due to the impeachment controversy between Congress and the Supreme Court.
"The economy is buoyant and I am confident the impeachment impasse will be resolved soon," she said. "As shown in the past, our democratic system has a tendency to be rocked by controversy but it has shown the capacity for bouncing back and moving forward."
The President said the economy "has been beset by transient doubts but has shown strong, consistent resiliency," adding "there is confidence in our stability" since investments "continue to pour in."
The business community earlier raised apprehensions about the impact of a possible constitutional crisis as a result of the stalled negotiations between leaders of Congress and Supreme Court justices on the impeachment complaint filed against Chief Justice Hilario Davide Jr.
The President stepped in to facilitate the resolution of the controversy, which has rocked the country and spawned renewed jitters that have pulled down the value of the peso against the US dollar.
Mrs. Arroyo, an economist, said the weakness of the peso was just a temporary phenomenon as the market reacts to jitters caused by the latest political events in the country, particularly the bid to impeach Davide.
While the peso skidded down to a new low at the opening of trading last Monday at P55.50 to US$1, she noted the peso remains fundamentally strong enough to absorb these shocks.
However, she warned that the escalation of this controversy may throw the country into a constitutional crisis.
"The nationís peace of mind is disturbed by political developments that are telegraphing signals of instability," the Chief Executive said.
She appealed to all concerned to help erase perceptions of political instability.
"I appeal for prudence and constructive action among our leaders," the President said. "We have to end this impeachment controversy at once but we want to make sure this will end well in the most proper, principled and righteous way."
Over the government-run Radyo ng Bayan yesterday, Presidential Spokesman Ignacio Bunye blamed the conflict between the legislature and judiciary over the impeachment bid against Davide for the business communityís perception of political instability in the government.
"The major cause of the pesoís decline is the perceived impending constitutional crisis, if no solution will be found on the impeachment case against the Chief Justice," he said.
Bunye said he is "confident the peso will go back to its normal level once the impeachment case is resolved."
The President and members of her Cabinet discussed the impact of the impeachment controversy during a Cabinet meeting held last Monday at the Land Transportation Office along East Avenue, Quezon City.
RP debt yields rise on political, peso concerns The Philippine Star 10/30/2003
Philippine debt yields rose 10 to 15 basis points yesterday as political worries, the weak peso and a government plan to raise P20 billion from retail Treasury bonds (RTBs) weighed on the market.
Dealers said the RTBs would siphon off excess liquidity and may lead to higher interest rates as players remain jittery over political wrangling ahead of next Mayís election.
"The bias is for interest rates to go up," said a dealer from a medium-sized bank. "Itís because of the RTBs. The (peso-dollar) exchange rate is still alarming."
Although the peso continued to recover yesterday, after it fell close to its record low of 55.75 to the dollar this week, dealers said it should be trading at stronger levels with dollar remittances from overseas Filipino workers usually robust at this time of the year.
The government said it wants to offer RTBs next month to help plug its fiscal shortfall, which it wants to limit to P202 billion this year or about 4.7 percent of projected gross domestic product.
Manila blew through three budget deficit targets in 2002, ending the year with a shortfall of P210.7 billion.
"More often than not, the RTB issue is oversubscribed," said a dealer at large local bank. "Itís going to siphon off a lot of excess liquidity in the market."
The government last offered three-year and five-year retail bonds in June, raising P74.313 billion, far more than the original offer size of P10 billion. Ė Reuters
Reported by: Sol Jose Vanzi
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